Forum Archive Index - February 2002

["ryanrite" <ryanrite@xtra.co.nz>]

Centennial to beat prospectus forecasts
February 28, 2002
Higher production and better coal prices has set Centennial Coal (CEY) on
track to beat prospectus forecasts it made last year. The coal company
posted a $15.2 million net profit in the first half to 31 December 2001,
compared to just $881,000 in 2000.

Revenues rose 91% to $67.4 million, while earnings before interest and tax
jumped to $16.4 million, from $2.2 million previously.

Operationally, coal production rose to 2.0 million tonnes, largely thanks to
its acquisition of a larger stake in the Spingvale mine. Centennial was also
helped by better-than-expected production from both the Springvale and
Clarence mines.

Centennial also received more for its coal, receiving US dollars for
delivering 800,000 tonnes to Delta Electricity under a 12 year contract. The
company also brought forward tax loss credits accumulated in the early
1990's.

In the prospectus for Centennial's $40 million capital raising last year,
the coal producer forecast net profit of $17.8 million for 2001/02.

"The company's strong operating performance is expected to continue at a
similar level for the next six months . As a result, the Directors are
confident that Centennial Coal will exceed its April 2001 Prospectus
forecast by more than 60%," said managing director, Mr Bob Cameron.

Mr Cameron was also bullish on prospects next year, saying that it expected
to sustain production despite the closure of the 100 year old Ivanhoe
Colliery.

Mr Cameron also hinted that further acquisitions might be considered now
that gearing had fallen with interest cover rising to 16.1 times.

"Centennial is currently evaluating several opportunities which the
Directors believe fit our strategy and would complement the Group's existing
businesses."

The directors declared an unfranked interim dividend of eight cents per
share, up from 2.5c.

SHAW Stockbroking's head of resources research Mr John Colnan said: "The
result was strong and underlines what these companies can do once they are
not hamstrung by out-of-the-money foreign exchange or hedging contracts.

"We note that despite recent price increases it is still on a reasonable
single-digit PE," he added.

At 1329 AEST, Centennial shares were trading 13c or 8% higher at $1.83.






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